A secondary sale is a transaction in which an existing shareholder sells their shares to another investor. No new shares are created and the company receives none of the proceeds — money flows only between the two investors. This is distinct from a "primary" issuance, where the company itself sells new shares to raise capital.
Why it matters to you
Almost every unlisted-share purchase you make is a secondary sale — you are buying from an employee, early investor, or founder via an off-market transfer. Because the company is not involved, due diligence rests entirely on you: verify the ISIN, the seller's title, and the price against a sensible FMV.
Example: An ex-employee's ESOP shares were sold to a new investor in a secondary sale; the company's records simply updated the holder, with no fresh capital raised.